Digital Magazines in 2012

This being the time of year when we look back with nostalgia, and peer into the future with a degree of hope, we think it may be useful to give some guidance as to our reasons for thinking that digital magazines are in for a very exciting and rewarding year in 2012. The business of digital magazines is clearly going mainstream. Here are some predictions:

  1. Apple will introduce iPad 3 in the second quarter and it will be a ‘retina display’ iPad, with the same measurements as iPad 1 and 2, but 4x as many pixels. This gorgeous iPad will deliver fantastic results for  richly illustrated magazines. Text-rich magazines will also seem smarter, sleeker and more appealing. Magazines that look really good in print will look even better on the iPad.
  2. Apple in mid-year will introduce a new digital TV with a different form factor than the iPads (surely more horizontal). There will be much surprise in the magazine industry that newsstand apps run fine and also look pretty special on the 40ish” TV. There will be even more surprise in the TV industry that Apple proposes to sell TV programs through iTunes, in much the same way as magazines are sold through iTunes newsstand; on subscription with free sampling, branding per program series and with in-app purchase. Channels will disappear in a puff of smoke. Apple’s skeuomorphed video ‘iCarousel’ will not be made of pine.
  3. Apple will maintain its lead in the tablet space – by 4th quarter still getting 60/70%+ by value of consumer spending on tablets, but there will significant competition, Apple will maintain its volume and its position by putting the low-density iPad 2 in the sub $200 range, after iPad 3 is out.
  4. Amazon will have to introduce a mark 2 Kindle Fire (Fire 1 will splutter in early 2012), but they will do so, and they will have some success in the ‘low end’ of the market. Amazon will not say precisely how many Kindles they have sold, unless/until they sell more than Apple sells iPads. So this time next year we will be ‘guessing’ that they have maybe 10% of the tablet installed base.
  5. The Kindle Fire will be more successful as a film device and a book reader than with magazines.
  6. But there will be another tablet competitor, from ‘left-field’, choosing a novel form factor and a completely different approach to the hand-held device opportunity. This unexpected beast will be surprisingly apt for magazines and newspapers.
  7. Flipboard will have an exciting year and will outpace its competitors in the social-aggregation space, yet it will turn out that the Flipboard business model is not particularly helpful to magazines or newspapers, and that the advertising revenues generated from these content networks is not a replacement for the brand advertising that once flocked to consumer magazines.
  8. Digital advertising prospects will continue to disappoint the consumer magazine titans, even from their own apps. Much wringing of hands at the failure to attract enough big brand advertising to closed apps.
  9. All the major consumer magazines will commit to subscription services through Apple and Amazon, even though they largely ‘lose control’ of their audience measurement.
  10. Conde Nast and Hearst will each get several million paid subscribers for their digital audience.
  11. Hearst will recognise the mistake they have made in not providing complementary digital access to their print subscribers, they will get over 2 million digital subscribers (one million existing print subscribers that go complementary, 1 million new revenues).
  12. Finance Directors will show increasing interest in the surprisingly consistent and growing revenue flows from digital magazine subscriptions. Private equity investors will even start to show interest in acquiring strong magazine brands which have been slow to tackle the digital opportunity.
  13. At least one innovative magazine company will spot a ‘formula’ for delivering high-end niche market digital magazines that were not previously though to be subscriber attractive.
  14. The custom magazine market will finally see the potential for developing digital magazines for major consumer brands. Info-tainment and sponsorship may have more promise than space-based, conventional, brand advertising.
  15. Publishers will realise that there is more pain than pleasure in developing a digital magazine platform in-house. So that will be good for companies that specialise in offering digital services to publishers who want to develop their own marketing and commercial strategy.
  16. Twitter will turn out to have even more attractions and potential for the digital magazine business than was apparent in 2011. Facebook and Google+ will generate more noise than substance for the digital magazine industry in 2012.

Yes this a very bullish view of 2012. One should also recognise that the magazine industry as a whole will find many challenges — recession in the global economy seems a real possibility; so there will be tough times for marginal magazines. But the digital turn is a big opportunity for magazines that have a cutting edge. Consumers are likely to continue to invest in digital resources through the downturn. This makes it even more important that the industry gets on top of the prospects that really are bright, and those prospects are mainly digital.

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